Dear Shareholders,
Peace, mercy, and blessings of Allah be upon you,
At the outset, it gives me great pleasure, both personally and on behalf of my colleagues, Board Members and the Executive Management of Privatization Holding Company, to extend our sincere appreciation for your continued trust and unwavering support. I am also pleased to welcome you to the Ordinary General Assembly Meeting of Privatization Holding Company and to present the Annual Report highlighting the Company's activities and financial results for the year ended 31 December 2025.
This year represents a pivotal stage in the Company's journey, characterized by a comprehensive reassessment of its operations and the establishment of new foundations for a more stable and efficient future.
Over the past several years, the Company has faced accumulated challenges that have impacted its financial performance and operational structure. This necessitated the adoption of bold strategic decisions aimed at addressing these challenges at their roots, strengthening the Company's financial position, and preparing it for a new phase founded on greater resilience, clarity, and sustainability.
In this context, the Board of Directors, in collaboration with the new Executive Management, developed a comprehensive turnaround plan built around two key pillars:
1. A comprehensive financial restructuring program, including the treatment of accumulated losses and enhancing the efficiency of capital utilization.
2. A strategic repositioning of the Company's business activities, focusing on investment opportunities that offer attractive returns while improving overall asset quality.
One of the most significant initiatives proposed in this regard is the reduction of the Company's share capital to offset accumulated losses. This regulatory and accounting measure aims to restructure the Company's capital base without affecting total shareholders' equity, ownership percentages, or resulting in any cash outflows. The objective is to present a more accurate and transparent financial position, enabling the Company to move forward with confidence toward the future.
During the year, the Company also undertook a comprehensive review of its investment portfolio, implemented practical cost-rationalization measures, enhanced operational efficiency, and strengthened governance and internal control frameworks in line with best practices and regulatory requirements.
Recognizing the importance of the next phase, management has focused on establishing a more flexible operating platform, strengthening internal capabilities, and adopting a more disciplined investment approach that balances risk management with return optimization.
Economic Outlook
The enactment of Kuwait's Public Debt Law marks an important step toward aligning the State of Kuwait with international best practices and economic reform initiatives. The law enables the government to issue highly liquid and low-risk debt instruments, which is expected to positively impact the private sector and investment activity in general by providing stable returns and broader growth opportunities for businesses. Over the long term, this will contribute to supporting the national economy and reducing dependence on oil as the sole source of government revenues.
A degree of caution continued to prevail amid declining inflation rates compared to previous years, while central banks maintained prudent monetary policies against a backdrop of escalating geopolitical tensions globally and regionally, as well as ongoing uncertainties affecting supply chains and the global economy.
Despite these challenges, the World Bank projected in its report issued last year that Kuwait's real GDP would grow by 2.7% in 2025, reflecting positive momentum in economic activity and a stable environment that enhances market attractiveness and investor confidence.
At the regional level, the economies of the Gulf Cooperation Council (GCC) countries demonstrated resilience in managing risks, achieving moderate and stable growth supported by recurring oil revenues despite fluctuations in oil prices. Furthermore, non-oil sectors are expected to experience relative recovery during 2026 as part of the ongoing economic diversification efforts aimed at achieving sustainable growth.
As for the GCC capital markets, their overall performance remained resilient, supported by strong regional financial positions and the U.S. Federal Reserve's decision to reduce interest rates three times during 2025. The Muscat Stock Exchange led GCC market performance with a gain of 28.2%, while Boursa Kuwait ranked second with strong performance, as the Premier Market Index increased by 21.17% and the Main Market Index by 20.20%, reflecting investors' confidence in the Kuwaiti market and reinforcing its regional standing.
Collectively, these developments provide a supportive and encouraging environment for our Company and strengthen our confidence in moving forward with our strategic objectives and creating sustainable value for our shareholders. We also aspire to redirect investments toward sectors with attractive risk-adjusted returns and capitalize on opportunities arising from Public-Private Partnership (PPP) projects and other initiatives that will support the Company's growth trajectory and maximize shareholder value.
Financial Performance
During 2025, the Company recorded a net loss of KD 15,727,754.
In line with the Company's strategy to address these financial challenges and improve its balance sheet structure, the Board of Directors recommended that the Extraordinary General Assembly approve a reduction in the Company's authorized, issued, and paid-up capital from KD 61,000,000 to KD 39,825,000, representing a reduction of 34.713%.
This will be achieved through the cancellation of 211,750,000 shares at a nominal value of 100 fils per share, with the objective of extinguishing part of the accumulated losses amounting to KD 21,175,000, based on the audited financial statements for the year ended 31 December 2025.
The Company's loss per share amounted to 25.78 fils during 2025, compared to a loss of 7.07 fils per share resulting from losses of KD 4,314,982 in the previous year.
Shareholders' equity attributable to the shareholders of the Parent Company stood at KD 35,417,515 as of year-end 2025, compared to KD 51,081,854 as of year-end 2024.
Strategic Developments and Major Projects
The year 2025 marked a significant milestone in the Company's investment portfolio.
The Company moved forward with restructuring ownership interests in the Aventura (J3) Project following approval from the Public Authority for Housing Welfare (PAHW), while injecting KD 3.56 million to complete the project's construction works. The project is expected to be completed during the second half of 2026.
The Company also strengthened its financial position within the hospitality sector by introducing a strategic partner holding a 25% stake in the Safir Sea View Hotel Project, located in Sabah Al Salem. This transaction generated cash proceeds of KD 2.15 million and provided additional support for the project, which has surpassed 75% completion.
Organizational Development and Digital Transformation
During the fourth quarter of the year, the Company commenced the implementation of a comprehensive restructuring program, which included organizational changes and the recruitment of experienced administrative and technical professionals.
These new competencies have contributed to the development of the Company's investment and financial strategies, aimed at maximizing returns, rationalizing expenses, and deploying available liquidity more effectively.
The Company also initiated a digital transformation program designed to modernize the working environment and enhance operational efficiency through the automation of internal processes and the implementation of integrated electronic systems for business management and corporate communication. These initiatives are expected to improve productivity, strengthen governance, and enhance oversight capabilities.
These measures reflect the Company's commitment to improving asset performance, enhancing financial results, and establishing the foundations necessary for a gradual return to profitability and long-term financial sustainability, ultimately creating lasting value for shareholders.
Governance and Dividend Distribution
Based on the financial results achieved during the year, the Board of Directors has recommended not distributing dividends for the financial year ended 2025.
We reaffirm our commitment to strengthening governance, transparency, and internal control frameworks in a manner that protects shareholders' interests and complies with all regulatory requirements.
Dear Shareholders,
The next phase requires focused effort and a clear vision. The Board of Directors firmly believes that the steps taken during this year represent the beginning of a genuine transformation journey aimed at restoring financial balance, rebuilding the Company on more efficient and flexible foundations, and enhancing its ability to deliver sustainable performance.
In this regard, we emphasize that the coming period will focus on achieving tangible results that will gradually be reflected in the Company's financial and operational performance, while adhering to the highest standards of governance and transparency in accordance with the requirements of the Kuwait Capital Markets Authority and international best practices for listed companies.
We also believe that the foundations established during this year provide a strong platform for transitioning into a new phase focused on restoring profitability and enhancing shareholder value over the medium and long term.
In conclusion, we extend our sincere gratitude to our valued shareholders and the relevant governmental and regulatory authorities for their trust and continued support. We also express our appreciation to the Executive Management and all Company employees for their efforts throughout this critical period.
We remain fully committed to pursuing our ambitious vision through disciplined execution and decisive action to overcome current challenges, achieve the best possible results, enhance shareholder value, and strengthen the Company's position in the market.
May Allah grant us success.
Peace, mercy, and blessings of Allah be upon you.
Abdullah Mohammed Al-Hajri
Chairman of the Board of Directors
Privatization Holding Company
+965-22322190 
info@phc.com.kw
+965-22409358 
